Are Microsoft and Yahoo talking or not?

There is talking, and then there's talking.

Microsoft's CFO Chris Liddell told investors on Monday at the Morgan Stanley Technology Conference that Yahoo has "not yet formally responded" to Microsoft's unsolicited buyout bid.

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Apparently, nothing has changed over the past two weeks, since we reported that Yahoo had not formally responded to Microsoft's offer and had remained "radio-silent."

And on the flip side, you have Liddell's boss, Microsoft Chief Executive Steve Ballmer, telling folks at CeBit in Hannover, Germany, that "a range of dialogue" has been occuring between the companies in regard to the buyout bid, according to an Associated Press report.

Meanwhile, in Henry Blodget's post on Silicon Alley Insider, he cites a source who indicates that the "range of dialogue" is occurring within Microsoft, rather than between the two companies.

However, it's not that far-fetched to envision representatives of both companies having informal talks, given that they run in the same circles, such as on board seats at Berkshire Hathaway and Morgan Stanley, or at technology conferences.

But when you're being pressed to open up your books and show the underbelly of your financials, this level of talks is in a whole different league. Think of it along the lines of talking to your neighbor about a huge bonus you received, verses showing your bank statement to that neighbor.

Get the picture.

In order to kick this deal forward, Yahoo has to have conviction. If Microsoft's offer falls short of valuing the company appropriately, then it will have to open up its books so Microsoft can fully understand its point and potentially raise its bid.